BERRIEN CENTER, MICH. -- The migrants showed up early this year, well before the strawberries or asparagus, eager for work, but according to local doctors, sicker than ever.

"Their health never really gets better," said Herbert Atkinson, who has practiced medicine here in the scrubby groves of southern Michigan for years. "They fester. By the time we see them, their problems are serious and expensive."

Those who serve the disadvantaged, here and throughout the nation, have grown accustomed to constant cycles of poverty and sickness. They also have grown accustomed to austerity, fiscal restraint and denial when it comes to providing care to the poor.

But when a federal district judge declared Michigan's Medicaid program invalid last month, ruling that the state had "completely failed" to pay hospitals enough to treat its poor patients, the state was pushed into a painful new era. For the first time, health care for the poor has become something like forced school desegregation once was in the South: It is under court order and being run by a federal judge.

"We saw three choices," said Charles Ellstein, vice president for health delivery and finance at the Michigan Hospital Association, which last year brought the suit that resulted in the court takeover. "Hospitals could go out of business. We could stop serving the poor, or we could sue. This is not something we were eager to do."

The situation in Michigan may be the most dramatic example of a health-care system for the poor that is beginning to collapse. Michigan could no longer guarantee access to care for all who need it. But it is certainly not the only one.

In Virginia, for example, hospital officials estimate that they will lose more than $50 million through inadequate Medicaid reimbursement this year alone. {Details on Page A14.}

Hospital officials in Virginia and more than a dozen other states have filed suits similar to the one in Michigan, charging that Medicaid reimbursement programs do not begin to cover the steeply rising costs of providing medical assistance to the 20 million to 30 million Americans who rely on them.

"The problem is getting worse every day," said Paul Rettig, head of the Washington office of the American Hospital Association, "not just in Michigan or Virginia, but nearly everywhere. Costs are rising so fast, and the money just isn't there."

Congress established the Medicaid program to ensure indigent people a basic level of health care. Every state has different rules, eligibility requirements and benefits. The federal government's contribution is determined by a complex formula that takes into account each state's average income and what level of coverage it chooses to provide.

In 1981, a seminal but confusing federal law called the Boren Amendment was enacted. Since then, each state is required to reimburse hospitals for Medicaid costs as long as they operate "economically and efficiently." Most lawsuits have grown from those last three words. Few people can agree on what economy means in medicine, because few people can agree on what services are essential.

In most cases, frustrated state leaders point to shrinking budgets, vast and growing payments for social welfare and hospital costs rising faster than any other segment of society. They add that tough federal mandates leave them little flexibility in deciding where to cut and where to spend.

In Michigan, where state officials have appealed the judge's ruling, the number of people eligible for Medicaid has remained fairly stable over the last decade, but demand for services and the resulting expenditures have grown by almost 100 percent.

Last year, nearly crushed by the pressure of increased demand and fewer federal dollars, the National Governors' Association called for a major restructuring of the health-care system. Many other legislative, public and private organizations also have sought some new and dramatic relief. But, for the moment, none seems on the horizon.

"It's all about choices," said Shelby P. Solomon, director of Michigan's office of management and budget. "I don't pretend for a minute that we are meeting every need that's out there. Who could? But this is not a problem we are going to be able to solve ourselves. It's going to take federal leadership and vision, something that I don't see a great deal of right now."

Everyone appears to agree that, like those of most other big states, Michigan's Medicaid program, which pays hospitals only 76 cents for every dollar they spend on the poor, is buckling under the weight of its responsibilities. Free hospital care is growing, and federal funds have dried up. In 1988, 74 percent of all hospitals in the state lost money on patient care, according to the Michigan Hospital Association.

Places such as Berrien General Hospital, the only facility in eight counties offering long-term care, lose more than $600 every time a Medicaid patient has a baby there. At Berrien, that happens at least once a day, usually more often.

Michigan leads the country in deaths from major, and often preventable, chronic diseases such as heart disease, diabetes and lung cancer, according to the Centers for Disease Control. It has one of the nation's highest infant-mortality rates, and black infants are three times more likely to die than whites.

Although the state has largely recovered from the brutal recession of the early 1980s, the shift away from heavy manufacturing has left millions with jobs that provide little or no health benefits. According to the Michigan Social Services Department, 1 million of the state's 9.2 million residents receive Medicaid. Another 1 million have no insurance, and 1.6 million are so seriously underinsured that they cannot hope to pay for treatment of any major illness.

"Those numbers are staggering," said C. Patrick Babcock, state Social Services director. "We are drifting into chaos, but it will take a national crisis before anybody does anything serious about it. We are strong on desire but short on will." Many people in the system -- doctors, nurses, hospital administrators, state officials -- admit that they are fed up.

Physicians receive so little money -- in some cases less than $15 for an office visit -- from the Medicaid program that many do not bother to fill out reimbursement forms. More, however, simply tell Medicaid patients to go away. State Social Services officials say they are investing nearly $2 billion in the Medicaid program for 1990, nearly 15 percent of the state's general funds.

They also note that only 60 percent of Michigan hospital beds are filled on an average day and that,with better management, costs could be sharply reduced.

"We are having a heck of a time paying the bills, there is no question about that," Babcock said. "But when I look at our system, with 40 percent empty beds and millions who have more insurance than they even need, I also say we can still shift a hell of a lot of money around."

The problem, most seem to agree, is that, all too often, money is not shifted to the right places. Hospital inflation is running at about 10 percent in Michigan, but Gov. James J. Blanchard (D) has proposed a 1 percent inflation adjustment for hospitals in the coming fiscal year. That forces many to take money set aside for building renovation or new equipment and use it to pay patients' bills.

"We don't have any more money to give," said budget director Solomon. "It's not like we are consciously trying to deprive people of what they need."

Perhaps the most difficult aspect of Michigan's Medicaid problem is how much all sides agree that a fundamental change is needed to solve the crisis. Increasingly, activists say it will take an emergency to force leaders to consider the toughest questions about what type of health care society is willing to provide.

Polls show that most people believe that some basic health care ought to be a right in the United States and that many people bristle at the thought of rationing services. But since few public agencies can provide the money for such a right, institutions such as hospitals have been forced to admit patients and worry about costs later.

"This is not a hospital problem or a medical problem," said Art Knoeppel, administrator of St. Lawrence Hospital in Lansing. "This is a basic social problem. We have decided as a society that, if you are alive, you should have access to medical services. And by default, that has become a problem for the hospitals.

"If we had all agreed that everyone in this country had a right to a Cadillac," he continued, "do you think it would have been left to General Motors to figure out how to pay the bill?"